Chancellor kills off big solar investments

Ignoring a mass appeal from the UK solar industry and its supporters (unions, ngos, consumer groups) the government has decided today to go ahead with changes to the feed-in tariff. Andrew Lee, Head of International Sales at Sharp Solar, accused the government of:

“…stifling job creation in an industry which has the potential to flourish in the UK. A limit of 50 kW is extremely low will affect community projects and small businesses, and hamper growth to the UK economy.”

It’s just the kind of green jobs investment to aid the UK’s recovery that we’re debating with Chhris Huhne at the TUC’s climate change conference on 6 July. Coming just a couple of days after the Green Economy Council discussed the need for clearer focus on green jobs growth, the government’s decision – like that on the Green Investment Bank – means the Treasury’s funding cap trumps all.

This decision will leave the UK solar power sector confined to domestic schemes just as major economies like China, Japan and Germany massively ramp up their solar ambitions, making solar power a massive part of their electricity systems. It’s crucial to a sustainable and competitive energy system in the UK too. We simply cannot afford to stifle an exceptionally popular technology that offers the prospect of subsidy-free green power for everyone if supported today. Globally solar power is currently being produced at less than $1/W and the industry is confident that, with investment under a stable policy framework, prices will continue to fall rapidly to below grid electricity prices.

Ray Noble, STA’s PV Adviser said;

“the Prime Minister needs to intervene to stop this terrible strategic mistake on solar power. Solar can make a major positive contribution to our urgent green electricity and jobs needs. Even mainstream analysis shows that under a stable investment framework the price of solar power will come down lower than many other energy generation options, including fossil fuels. This letter shows solar has widespread and diverse support that should not be ignored.”

The grim news came even though Energy and Climate Change Minister Greg Barker’s acknowledged last week that DECC was underestimating the potential for solar. His comments follow the Solar Trade Association’s publication of an alternative Solar Revolution Strategy, which argued for a doubling of investment in solar to deliver strong jobs and manufacturing and subsidy-free green power for everyone by 2017-2019.

Signatories to a letter to the PM included RSPB, Friends of the Earth, TUC, major construction group Kingspan, UK solar manufacturer Romag/Gentoo, NFU, Tony Juniper and Dr Caroline Lucas who all urge the Prime Minister “to require DECC to review the situation and take action to raise UK ambitions for solar power in order to ensure the UK maintains and builds a strong solar industry.”

As Dave Snowden, Chief Executive of the Micropower Council, said: “This is bad news for many worthwhile projects – schools, communities, public buildings.” Something for the Green Economy Council to look closely at.

Written by Philip Pearson

Philip is a former Senior Policy Officer in the TUC’s Economic & Social Affairs Department, working on issues around climate change, energy and transport.